Texas Passes Eminent Domain Reform That May Actually Protect Private Property Owners From Economic Development Takings

Texas voters turned out (albeit in low numbers) on November 3^rd to overwhelmingly approve Proposition 11, a measure constitutionally restricting the eminent domain power of government to take private property from owner and give it to another private entity.

Proposition 11 states that any property taken by eminent domain must be owned, used and enjoyed by the public at large, by state or local government, or another agency granted eminent domain authority. The measure specifically prohibits a taking for the purpose of economic development or to enhance tax revenue. Further, the legislature in the future will need a two-thirds majority in order to grant the power of eminent domain to any agency.

State measures of a similar nature have rolled across the country since the 2005 U.S. Supreme Court decision of Kelo v. City of New London, in which the court upheld a city’s taking of private property in order to sell it for private development to improve the city’s economy. While the Fifth Amendment of the U.S. Constitution prohibits private property from being taken from the government except for “public use,” the high court in Kelo held that the benefits of economic growth are a public use sufficient to constitute a taking under the city’s eminent domain power.

California passed its own eminent domain reform in June 2008 with the passage of controversial Proposition 99, following the defeat of an earlier attempt (Proposition 90) in 2006. Proposition 99 prohibits government from taking private property from one owner in order to transfer it to a private person or business entity. However, the restriction only applies to owner-occupied residences that have been occupied for at least one year. Prop 99 does nothing to limit takings of rental properties, apartments, small businesses, churches, etc. Moreover, the restriction on owner-occupied residences itself contains many exceptions.

While Proposition 99 may offer some protections for homeowners, it leaves alone the power to take private property for economic development, unlike the Texas ballot measure. Developers and promoters of economic redevelopment often target small business owners in economically-depressed areas as opposed to residential areas. Redevelopment agencies continue to focus their authority on these areas which did not receive Prop 99 protection, and the specter of eminent domain continues to put enormous pressure on property owners to cooperate and sell “voluntarily,” rather than face government condemnation.

The provisions and loopholes of Proposition 99 are numerous and complex. If a redevelopment agency is seeking to acquire your property with the use or threat of eminent domain, you should speak with an experienced eminent domain lawyer to ensure that your rights and interests are protected. In the Los Angeles area, contact Fisher & Talwar at (213) 891-0777 to speak with one of our highly experienced eminent domain attorneys.

California Considers Seizing BeauRivage Property by Eminent Domain

The California Transportation Commission (CTC), the National Park Service, and the Santa Monica Mountains Conservancy is seeking to obtain a part of the BeauRivage restaurant property, which is privately owned by Daniel Forge, through eminent domain. The reason for this is that the State is trying to facilitate the return of steelhead trout to Solstice Creek. Solstice Creek is approximately five feet to ten feet wide and located in the Santa Monica Mountains National Recreation Area, and Forge's restaurant is located near Pacific Coast Highway and Corral Canyon Road.

California's Wildlife Conservation Board has already approved a $200,000 grant to the National Park Service, in conjunction with the State Coastal Conservancy, to remove the obstacles that are preventing steelhead trout from migrating on Solstice Creek. Thus far, costs of ongoing restoration efforts of this area are estimated to be in the multi-million dollar range.

Historically, Solstice Creek was thriving with steelhead trout, and significant efforts are being made to encourage their return. According to the Chief of Planning, Science, and Resource Management with the U. S. National Park Service, steelhead trout serve an important role in telling us that our ecosystem is healthy and vibrant. Another environmental official with the Santa Monica Mountains Conservancy says that steelhead trout are able to survive in very warm waters, and therefore may be the only steelhead that can survive in California in the next half century.

However, to ensure the return of the steelhead trout to Solstice Creek, the CTC and the other partnering organizations are considering whether to take a portion of Forge's property and build "fish ladders" to enable the fish to migrate upstream from the parking lot area of Forge's property. The CTC will decide on whether to acquire a part of Forge's property for this purpose on October 14th and 15th.

Forge is against the project because the project may hurt his business, since the State would be eliminating parking spaces to the restaurant and the north entrance of his property would be closed off. The CTC, however, insists that they are working with Forge to reach an amicable agreement, and if no agreement is reached, then condemnation will be used as a last resort.

Eminent domain generally refers to the power of the government to acquire private property for a public purpose without having to obtain the consent of the owner. The U.S. Constitution, specifically the Fifth Amendment, and the California Constitution authorize governmental entities to use eminent domain powers to acquire private properties for public use. Private property owners do have rights though--namely, property owners are entitled to fair and reasonable compensation for the condemnation of their property.

Three main conditions must also be met before the government can acquire private property for public use. These three conditions include:

· Public interest and necessity create a need for the government's proposed project;

· The project is planned or located in such a way as to maximize the public good and minimize private injury; and

· The property that is sought is necessary for the planned project.

In this particular case, the issue of "necessity" of the restoration of the Solstice Creek area for steelhead trout remains controversial. Some people have argued that the considerable expenses involved with having the steelhead trout return outweigh the benefits that may result from the project. Others continue to assert that helping the steelhead trout survive is of critical importance to our ecosystem.

To view an article regarding this topic, published in The Malibu Times, please click on the following link: http://www.malibutimes.com/articles/2009/09/23/news/news5.txt

Eminent domain is a complex area of the law, where having a thorough understanding of the law is of critical importance. If you are faced with the possibility of the condemnation of your property by a public entity, please contact one of our experienced and knowledgeable Los Angeles eminent domain lawyers at Fisher & Talwar or call us at (213) 891-0777.

California Redevelopment Association - Budget Crisis

Facing a state budge deficit, the California State Legislature recently passed a budget, where $1.7 million would be taken from redevelopment agencies this year and $350 million next year, most of which would not be reimbursed. The California Redevelopment Association (CRA) is likely to file a lawsuit against the state opposing the major cut in funds.

Role of CRA
The CRA is a not-for-profit organization that represents redevelopment agencies throughout California. Presently, CRA represents 350 redevelopment agencies statewide, and has associate members in the private sector, such as developers, financial institutions, and redevelopment consultants. Redevelopment agencies are generally separate public bodies that report to the local governing entity of a particular community. The overall purpose of these agencies is to eliminate blight from certain local areas through development and reconstruction.

Although redevelopment agencies are run by local governments, they are in fact state agencies. This is why California had the ability to propose budget cuts for redevelopment agencies throughout the state.

Power of Redevelopment Agencies
Once a plan is approved to redevelop a particular area, the redevelopment agency has the power to acquire the subject property. Agencies have the power to do the following:

• Buy and sell property
• Make loans or grants to carry out the redevelopment plan
• Rehabilitate or remove structures
• Ability to use a part of property tax money to partner with private developers for redevelopment purposes

Another critical power redevelopment agencies have is the power of eminent domain. In general, eminent domain is the power of governmental bodies to acquire or take private property for a public purpose.

Criticisms of Redevelopment Agencies
Although proponents of redevelopment claim that redevelopment agencies have helped create affordable housing, improved neighborhoods, and created jobs, many individuals have questioned or criticized redevelopment agencies.

An Orange County Register columnist has stated that the U.S. Supreme Court's decision in Kelo v. City of New London, a significant eminent domain case from 2005, inadvertently expanded the scope of authority of redevelopment agencies. Kelo was a five to four decision, where the U.S. Supreme Court held that a city was permitted to take another person's private property and sell it for the purpose of private development to revitalize the city's declining economy. The court found that doing so did not violate the U.S. Constitution's Fifth Amendment "Takings Clause," which states that private property can only be taken for a public use.

Opponents of redevelopment agencies argue that redevelopment agencies are no longer targeting "blighted" areas, and instead are allowing private developers to build new shopping centers and stores on so-called "blighted" properties. For instance, one redevelopment project that was questioned was a dispute, settled in 2003, where the city of Cypress tried to seize church-owned property to build a Costco. Another controversial project involved the city of Indian Wells, a wealthy area near Palm Springs, that used redevelopment funds to build a championship golf course that was surrounded by a resort.

A recent article by the Los Angeles Times discusses the position of both proponents and opponents of redevelopment agencies.

An experienced eminent domain lawyer can ensure that your rights and interests are protected if a redevelopment agency is seeking to acquire your property through eminent domain. If you need legal assistance of have a question regarding eminent domain, please contact one of our Los Angeles eminent domain lawyers at Fisher & Talwar today or call us at (213) 891-0777.

Resolutions of Necessity Should be Clearly Defined

A general principle of state and federal eminent domain law is that private property may only be taken for a particular public use. In a California Court of Appeal decision by the Third Appellate District, City of Stockton v. Marina Towers LLC, the court reaffirmed that when a public entity plans to acquire property by eminent domain, the public entity must first adequately identify the project for which the property will be used for before condemning the property.

California Code of Civil Procedure Section 1240.030 states that before a public entity acquires private property for a "proposed project" by eminent domain, the public entity must meet three requirements:

• Public interest and necessity require the project
• The proposed project is planned in a manner that serves the greatest public good and causes the least private injury
• The property sought is necessary for the project.

Additionally, the public entity must pass a "resolution of necessity" before condemning private property. The resolution of necessity must describe the public use for which the property will be taken, and the resolution must contain findings showing that the three requirements for Section 1240.030 have been met. Further, the resolution cannot be adopted by the public entity until the affected parties are given notice of the entity's plans to acquire the property, and hearings are held to determine if evidence exists to support the requirements of the resolution of necessity.

In the Marina Towers case, the City of Stockton (City) sought to obtain private property owned by Marina Towers LLC (Marina). The City held hearings and Marina had an opportunity to question the City's attempt to take the property by eminent domain. However, no one at the hearing identified the specific public project that justified the proposed taking. Instead of identifying a specific public use for the property, the City unanimously passed vague resolutions of necessity.

According to the Court of Appeal, the City's "resolution of necessity" failed to identify the project, which merely recited that Marina's property was "necessary for the public project." The court added that identifying the project was necessary to protect the private property owner's right to procedural due process. The court reasoned that if the public entity is required to engage in a good faith consideration of the advantages and disadvantages of acquiring the subject property, then it is essential for the private property owner to know what the property would be used for so that there can be an honest discussion of the issues.

Furthermore, the court rejected the City's argument that the project description in the resolutions was valid and adequate. The City argued that the resolutions had stated the property would be used for a "public project," and that since the City did, in fact, build a ballpark and apartment building on the subject property after the resolutions were passed, the resolution's project description was sufficient. The court held that if the court accepted the City's argument, it would invalidate the purpose of having resolutions of necessity in the first place, which was to ensure that the public entity carefully evaluated the need of the project and the property before condemning the property.

Significance of the Decision
Marina Towers reaffirms certain protections that private property owners have in eminent domain actions. The decision shows that if you own private property and a public entity is planning to condemn it, the public entity must identify a specific public use or "public project" for the property before condemning the property. By being informed of the proposed use for the property, property owners are better equipped to argue against the taking of the property and question the soundness of such proposals.

Thanks for reading our blog. We hope that you found it helpful and informative. If you need legal assistance with an eminent domain or inverse condemnation matter, please contact one of our experienced Los Angeles eminent domain lawyers at Fisher & Talwar today or call us at (213) 891-0777.

California Court of Appeals Strikes Down Rancho Palos Verdes Development Moratorium

In Monks v. City of Rancho Palos Verdes, the California Court of Appeals, Second District in Los Angeles recently struck down a Rancho Palos Verdes moratorium on development in a specific area of the city. Because the moratorium was enacted in 1978 after a period of mudslides, some landowners have been prevented from developing their properties for up to 30 years.

The city had attempted to make it possible for landowners to apply for an exemption from the moratorium, and the plaintiffs in this case applied to be able to build their homes. While their applications were pending in 2002, the city council made it harder to meet the application criteria and thus made it impossible for the plaintiffs in the case to build homes on their land. The landowners sued under the state takings clause.

The city argued that it was trying to keep its citizens’ and their homes safe from landslides. However, the court said that the city could not freeze all building just because another landslide might occur or because people might get hurt at some undeterminable time in the future. Using a landmark United States Supreme Court case, Lucas v. South Carolina Coastal Council, the California Court of Appeals held that the Rancho Palos Verdes moratorium deprived the landowners of all “economically beneficial use” of their land, which directly contradicts Lucas. Because these parcels of land were zoned for single-family houses and the plaintiffs could not build homes on this land, the land was economically useless to them.

The city also disagreed with the court about how dangerous it was to build on the land, and could not justify the building prohibition under other areas of law like nuisance or property law. All the landowners wanted to do was build standard homes on their land, and by not allowing them to do that, the court ruled that the city had to compensate them in some way for the economic loss.

How the Monks Decision Might Impact You
The court’s decision in this case might affect you without you knowing it. While California courts had traditionally been reluctant to rule in favor of plaintiffs in matters related to cities over-regulating property, this case now has the potential to open the floodgates. Now there is precedent that moratoriums on building can be considered permanent takings in certain circumstances and therefore would be unconstitutional under California's Constitution. Even if you are allowed some use for the land, it still might be unconstitutional to prevent you from building on it.

Citizens in other communities with similar restrictions on building, developing, or construction might now have a better chance to win compensation if similar moratoriums have prevented building or development. Cities might also have to be more careful with the restrictions they currently have on the books and any they might try to enact in the future.

Thanks for reading our blog. We hope that you found it interesting and informative. If you need legal assistance with an eminent domain or inverse condemnation matter or if you believe a community restriction is keeping you from building on land you own, please contact one of our Los Angeles eminent domain lawyers at Fisher & Talwar today or call us at (213) 891-0777.

Californians Pass Proposition 99 to Seek Protection of Their Homes

In 2005, the United States Supreme Court decided Kelo v. City of New London, which profoundly changed eminent domain law in this country. In this case, the Supreme Court held that it is not a violation of the Fifth Amendment Takings Clause for a city to take someone’s private property and sell it for private development in the hopes that it will improve the city’s bad economy. The Fifth Amendment requires that private property can only be taken for “public use” with the payment of just compensation. The Court, using a very broad interpretation of what constitutes a public use, held that taking the land to help the city’s economy was sufficient to be considered a public use.

This decision sent shock waves throughout the country because, in general it meant that it was easier for the government to condemn privately owned property for the benefit of private parties, as long as they said they were using it to help the economic condition of the neighborhood. Although the impact of Kelo was somewhat limited in California due to California’s existing redevelopment law, groups in California started to fight back immediately. In 2006, Proposition 90 was placed on the ballot. It would have limited Kelo’s affects in California by putting several restrictions on how the government could take private property. The measure failed, however, after only receiving 47.6% of the vote.

Undeterred by Proposition 90’s failure, several groups immediately began working on another proposition that would limit the state’s right to take private property. In 2008, Californians again went to the polls to vote on eminent domain matters – this time for Propositions 98 (the “Rent Control Rollback”) and 99 (the “Homeowner Protection Act”). Proposition 98 received much negative attention because it would have removed rent control. Proposition 99 was similar to 2006’s Proposition 90, except that it was written more narrowly. Instead of making several changes, Proposition 99’s effect was to amend the California Constitution, Article 1, Section 19 to add Section 19(b), to prohibit “acquiring by eminent domain an owner-occupied residence for the purpose of conveying it to a private person.”

Some opponents of Proposition 99 felt it did not go far enough in its protection, because it would only protect “owner-occupied residence[s].” Because of this limitation, farms, churches, and most importantly, small businesses would receive no protection from Proposition 99. It also included exceptions for situations where the land would be used for public works or improvement, public health and safety, and crime prevention.

Proposition 99 also included a provision that would nullify any other attempt to amend the same section of the state constitution on the same ballot. It passed with 62.5% of the vote; Proposition 98 only received 39%. Because of the nullification provision in Proposition 99 and the fact that it received more votes than 98, Proposition 98 would not have been enacted even if it had received a majority.

Thanks for reading our blog. If you need legal assistance or simply have a question regarding eminent domain or inverse condemnation, please contact one of our Los Angeles eminent domain lawyers at Fisher & Talwar today or call us at (213) 891-0777.